Microeconomics 202 Final Exam – The term_ has come

1) The term ______c________ has come to refer to the collection of government programs designed to alleviate economic hardship.

a. Coase Theorem

b. Monetary Stabilization

c. Welfare State

d. Elasticity

2) In the United States, data related to poverty are collected and published annually by the Department of Health and Human Services. This data is used to determine
the average poverty levels of income for a non-farm family. These cutoffs are called:

a. Income inequalitylines

b. Poverty thresholds

c. Transfer thresholds

d. None of the above

3) An example of a positive externality might be:

a. The public benefit obtained from subsidized flu shots.

b. Air pollution

c. The BP oil spill in the Gulf

d. None of the above

4) How does the Government encourage positive externalities?

a. Subsidies

b. Increased taxes

c. Both of the above

5) How does the Government discourage negative externalities:

a. Subsidies

b. Increased taxes

6) According to your textbook, a cause of poverty might be:

a. Lack of education

b. Lack of proficiency in English

c. Discrimination

d. All of the above

7) When you enjoy the benefits of a good without paying for it, you are considered a:

a. Ghost Rider

b. Free Rider

c. Good Rider

d. Cheap Rider

8) A positive or negative impact (spillover) on a party not directly involved in an economic transaction, is commonly referred to as an:

a. Externality

b. Rationality

c. Bowie transfer

d. None of the above

9) Air pollution is an example of a:

a. Negative externality

b. Positive externality

c. Adverse externality

d. None of the above

10) People receiving annual flu shots is an example of a:

a. Negative externality

b. Positive externality

c. Provocative externality

d. Contributory externality

11) If a good is both nonexcludable and nonrival in consumption, it is considered to be a:

a. Private good

b. Common good

c. Artificially scarce good

d. Public good

12) If a good is both excludable and rival in consumption, it is considered to be a:

a. Private good

b. Common good

c. Artificially scarce good

d. Public good

13) If a good is both nonexcludable and rival in consumption, it is considered to be a:

a. Private good

b. Common good

c. Artificially scarce good

d. Public good

14) All public goods are supplied by the government.

a. True

b. False

15) When the government sets a limit on the amount of pollutants that can be emitted, issues traded emissions permits, and enforces a yearly rule that a polluter most
hold a number of permits equal to the amount of pollutant emitted, we call this system:

a. Bob and weave

b. Policy and permit

c. Cap and trade

d. Capture and diffuse

16) Which of the following is not considered a factor of production?

a. Land

b. Labor

c. Capital

d. Music

17) How is the price of a factor of production determined?

a. Supply and demand

b. The Government sets the price

c. Wild guess

d. None of the above

18) Wages are often higher or lower depending how attractive or unattractive the job is. Workers with unpleasant or dangerous jobs demand a higher wage than workers in
a similar job that is less dangerous. This is known as:

a. Compensating differentials

b. Efficiency wages

19) Sometimes employers pay higher wages than the market determined wage. This type of incentive is used by employers to motivate employees to work harder and to
reduce employee turnover. This is commonly referred to as:

a. Compensating differentials

b. Efficiency wages

20) When the people or firms causing the externalities pay for them, we say the externality has been:

a. Internalized

b. Externalized

c. Subsidized

d. Villianized

21) Which of the following is an example of an activity that generates a negative externality?

a. You buy a new car, then discover it needs a new transmission.

b. Your next door neighbor mows his lawn at 4:00 AM in the morning.

c. After Jane bought health insurance, she began racing motorcycles on the weekend.

d. None of the above

22) Which of the following best describes a negative externality?

a. Your neighbor loves to bake bread and always brings you a loaf fresh and hot from the oven.

b. Your neighbor has an ornamental pond that breeds mosquitoes.

c. Your neighbor has invested in beautiful landscaping, increasing the value of all houses on the block.

d. Your neighbor has a pool and has given you an open invitation to come over and swim.

23) Which of the following is an example of a nonexcludable good or service?

a. Ice cream

b. National defense

c. Tickets to a Detroit tigers baseball game

d. All of the above are considered nonexcludable goods or services

24) When Joe watched a television movie, his viewing was ____________ in consumption because other people ______________ able to view the movie at the same time Joe
did.

a. Nonrival; were

b. Rival; were

c. Rival; were not

d. Nonrival; were not

25) Which of the following best fits the characteristics of a private good or service?

a. An ice cream cone

b. Fire protection

c. Police protection

d. Traffic light

26) Which of the following is most likely an artificially scarce good or service?

a. Tickets to a boxing match

b. Pay-per-view of a boxing match

c. Health care

d. Police protection

27) A common measure of the inequality of income distribution, is known as the:

a. Welfare State

b. Free Rider Coefficient

c. Means-tested Coefficient

d. Gini Coefficient

28) The S & P 500 is an example of a:

a. Stock exchange

b. Primary market

c. Capital structure

d. Stock index

29) An initial public offering of stock (IPO) is first sold on the:

a. Stock index

b. Secondary market

c. Money market

d. Primary market

30) If a company declares and implements a 2 for 1 stock split and you currently own 100 shares of the company’s stock, how many shares of the company’s stock will you
own after the split?

a. 50 shares

b. 100 shares

c. 150 shares

d. 200 shares

31) If a company declares and implements a 2 for 1 stock split and you currently own 100 shares of the company’s stock worth $1,000 ($10 per share), how much will your
stock be worth after the split?

a. $500

b. $1,000

c. $1,500

d. $2,000

32) If a company declares and implements a 1 for 2reverse stock split and you currently own 100 shares of the company’s stock, how many shares of the company’s stock
will you own after the split?

a. 50 shares

b. 100 shares

c. 150 shares

d. 200 shares

33) The NASDAQis an example of a:

a. Stock index

b. Stock exchange

c. American depository exchange

d. Money market

34) The Gini coefficient can also be used to measure the distribution of wealth.

a. True

b. False

35) The distribution of income in the United States has become more equally distributed in the last 10 years.

a. True

b. False

36) A ticket to a concert hall is excludable if the concert hall can prevent people who do not have a ticket from entering.

a. True

b. False

37) Airplane seats are rival in consumption.

a. True

b. False

38) A good is excludable if nonpayers can be prevented from consuming it.